CORRECTED-Nikkei rises to 4-1/2 year high on strong US jobs, weak yen

(Topix milestone corrected to October 2008 in fourth paragraph)
* Sumitomo Mitsui jumps after saying to repay bailout funds
* U.S. jobs weakens yen, adds to bullish mood
* Automakers boosted by Citi target price hike - analyst
By Sophie Knight
TOKYO, March 11 (Reuters) - The Nikkei share average rose to
its highest since Sept. 2008 on Monday morning as signs of
recovery in the U.S. jobs market boosted investor sentiment and
a weaker yen fuelled gains in exporters and banks.
Sumitomo Mitsui Trust Holdings Inc shot up 4.5
percent to a four-year high after the bank said it would repay
200 billion yen ($2.1 billion) in public bailout money, ending
more than a decade of partial government ownership.
Mizuho Financial Group Inc and Mitsubishi UFJ
Financial Group Inc gained 3.9 and 4.9 percent,
respectively, in heavy trade as the softer yen and government's
reflationary policies were expected to stimulate demand for
loans, a trader said.
The Nikkei rose 0.8 percent to 12,387.68, a level
not seen since just before the collapse of Lehman Brothers
roiled global markets in September 2008. The broader Topix
advanced 1.7 percent to 1,038.19, its highest since
October 2008.
The gains were underpinned by the yen slumping to more than
96 per dollar, its weakest since August 2009, after unexpected
strength in the U.S. jobs report last week.
Signs of a recovery in the U.S. labour market bolstered
sentiment among investors in Japanese stocks, which are already
riding a bullish streak on expectations of aggressive easing by
the Bank of Japan under governor nominee Haruhiko Kuroda.
"On a dollar basis, Japan is now significantly
outperforming, and from that perspective it's reflecting the
real recovery signs emerging globally for Japanese exports that
go beyond the weaker yen," said Stefan Worrall, director of cash
equities at Credit Suisse.
Honda Motor Co Ltd, Nissan Motor Co Ltd
and Yamaha Motor got an extra boost from Citi target
price hikes, according to an analyst, rising between 2.6 and 3.6
percent.
Sharp Corp was out of favour, however, falling 1.6
percent after the Asahi newspaper said Hon Hai Precision
Industry Co Ltd would not invest in the troubled
electronics maker before a March 26 deadline.
Gains in exporters, banks and real estate have largely led
the Nikkei's 42 percent rally since mid-November, when Prime
Minister Shinzo Abe stepped up the calls for aggressive monetary
and fiscal policy that saw his party sweep to power in December.
And while a softer yen has improved the fundamentals for
Japanese companies, some wonder if the sharp gains have made
stocks overpriced.
"The Topix's 12-month forward price-to-earnings ratio is now
13.3, which implies that investors are pricing in a 50 to 60
percent increase in profits for companies, based on the weaker
yen," said Masayuki Doshida, a senior market analyst at Rakuten
Securities.
"That means Japanese shares are no longer looking so cheap
compared to U.S. or German stocks, which may blunt the rally,"
he said.
(Reporting by John Mair)